Aegon UK, Cushon Master Trust, M&G and the British Business Bank have committed £200m (€229m) to British Growth Partnership Fund I, an investment vehicle aimed at helping pension schemes increase allocations to UK venture capital.
The fund is designed to address structural barriers that have historically limited pension fund access to the asset class, despite the UK being one of the largest global venture markets.
It marks the first time the British Business Bank has raised external capital from multiple investors, securing commitments from three large UK defined contribution schemes and master trusts.
Aegon UK has committed £100m via its £14bn Universal Balanced Collection (UBC) fund, to be deployed over three years. The investment also represents the first allocation to UK venture capital for both Aegon and Cushon.
The Bank has partnered with Mobius, whose unit-linked structure facilitated the Cushon investment.
Through the fund, participating pension schemes gain access to venture opportunities sourced from the Bank’s pipeline and network of more than 150 funds.
To demonstrate early deployment, the fund will make an initial £8m investment in autonomous driving company Wayve, contributing to the Bank’s £25m investment announced in February.
Louis Taylor, chief executive of British Business Bank, said, “This is a defining moment for the Bank and is a major step forward in mobilising UK pension fund capital into venture. The UK has the world’s third-largest venture capital market, yet pension fund capital has historically been deeply underrepresented.
“To maximise the value of great British innovation, we must bridge the gap between the UK’s large domestic savings pool and our fast-growing companies.”
He added that the Bank is “stepping up” to provide pension funds with routes into the market, including through the British Growth Partnership and Venture Link.
Venture Link is an online portal launched by the Bank providing visibility on its investments in venture and growth capital funds that remain open, supporting institutional investors navigating the market.
He continued: “The launch of these initiatives represents a key milestone in delivering the Mansion House reforms and will help pension funds to access outstanding new opportunities on their doorstep.”
Ian Connatty, managing partner at the British Growth Partnership, said: “Pension funds have long recognised the strength of UK venture capital, but structural barriers have limited their access to the market.
“By bringing together leading pension funds and deploying capital at speed, British Growth Partnership Fund I demonstrates how these barriers can be overcome and provides a blueprint for others to follow. We will be building on this momentum in the year ahead.”
Lorna Blyth, managing director of investment proposition at Aegon UK, noted: “This partnership gives us the ability to draw on the British Business Bank’s deep market access and established pipeline of UK scale-ups, opening up access to high-quality UK venture opportunities that would otherwise be out of reach for DC pension savers.
“This is a powerful step forward in strengthening diversification, delivering value for money, and ensuring our members benefit from innovative companies shaping the UK’s future economy.”
Alex Seddon, head of impact and private equity at M&G Investments, added: “This is a significant step forward in connecting UK pension savings with the businesses driving future growth. As a long-term investor with more than £100bn already deployed across the UK economy, initiatives like the British Growth Partnership are critical to unlocking and supporting the next phase of innovation, productivity and jobs across the UK.”
Veronica Humble, chief investment officer at NatWest Cushon, said, “As a signatory to both the Mansion House Compact and the Accord, we’re committed to directing investment into innovative, high-growth UK businesses to drive long-term returns for our customers, and the British Growth Partnership is vital to unlocking these investment opportunities.”
